The University of Minnesota incorporated performance-based procurement into planning the Health Sciences Education Center under construction at Harvard and Delaware streets in Minneapolis. University project manager Trevor Dickie, photographed at the site, says the goal is for the project to perform 70 percent better than the state energy code requires. (Staff photo: Bill Klotz)

Sustainable: Plugging energy into construction planning

On Mayo Clinic’s campus in Rochester, one of the first health care buildings in the country to use “performance-based procurement” has begun to take shape.

Performance-based procurement makes energy efficiency a priority in planning new buildings. In the case of the 155,000-square-foot addition to the Generose Building on Mayo’s St. Marys campus, planners applied principles of performance-based procurement to establish energy-consumption standards for the completed project.

Ken Potts of Mayo’s Facilities Project Services says the clinic wants to reduce energy consumption in existing and new buildings, so performance-based procurement makes sense. “It’s a new approach industrywide,” he said. “Mayo has looked at energy conservation in many ways over the years. … Performance-based procurement is another arrow in the quiver.”

Mayo may be a pioneer in performance-based procurement, but it is not alone. The slowly emerging trend has begun to capture the attention of building owners, especially in the public realm, who want energy efficiency to be an important factor in planning and designing new structures.

Among those using performance-based procurement with buildings planned or under construction are Metro Transit, the affordable housing nonprofit Aeon, the University of Minnesota, and municipal governments building an emergency response training center in Cottage Grove. Several other projects have elements of performance-based procurement and are part of a study released in December 2017 by the Minnesota Department of Commerce.

Under performance-based procurement, a building owner first establishes a baseline of energy efficiency desired in a new building. This is commonly referred to as “energy use intensity,” or EUI. Then all the people involved in a project, from architects and engineers to contractors hired to build it, know the goals and plan accordingly.

“It’s an owner-driven standard,” said Richard Strong, research fellow at the University of Minnesota’s Center for Sustainable Building Research. “Since owners pay for energy-efficiency improvements, the design team is on notice … that they have to achieve the standards in their contract. They’ll be in default if they can’t meet the energy-efficiency standard.”

Strong and his colleague Patrick Smith joined two researchers from Seventhwave, a Madison, Wisconsin-based sustainability consultancy, to produce a study, “Taking a Performance-based Approach to Building Procurement.” It’s a highly engaging and wonkish study of how thinking about energy first can lead to better performance later.

“The thing that excites me the most about [performance-based procurement] is that it allows us to capture everything about the building that influences the performance,” said Scott Hackel, a principal with Seventhwave. Existing programs, such as building codes and the U.S. Green Building Council’s Leadership in Energy and Environmental Design standards, tend to target design but not other energy-related factors.

Other attributes matter just as much, he argued, especially when energy efficiency becomes a goal. Among these are construction quality, operations staff training and the commissioning process after construction when structures are tested to see if they perform as expected. Performance-based procurement “evens the playing field because design has been the focus before,” Hackel said.

In Minnesota, buildings receiving money from state obligation bonds must follow the state’s B3 Guidelines for sustainability and meet energy-performance standards outlined in in the SB 2030 Energy Standard, Strong noted. This has opened the door to agencies and even nonprofits receiving state money to consider performance-based procurement in future projects.

Mayo and the U of M

Mayo’s Generose Building project doubles the size of the building by adding three floors. Mayo’s request for proposals highlighted performance-based procurement, and the clinic decided to hire the architecture firm HDR Inc., based in Omaha. The RFP incorporated a requirement that the building function 20 percent better than the existing one as measured by EUI. “It’s a bit like miles to gallon for a car … and we wanted a high-efficiency car,” Potts said.

Two technical advances helped the cause. One was benchmarking studies that reveal how much buildings of similar size and function operate. For the Generose addition, Mayo simply used the existing building, which has an EUI of 155. The RFP and the subsequent contract contained an EUI goal of 122. The contract withheld a small percentage of the design fee that would be paid if, after a year’s performance, the EUI goal had been met, Potts said.

Architects used computer modeling to show how different designs would affect energy use. When investigating the addition’s building envelope — the exterior — HDR proposed a few options. One, a curtain wall of glass, is a popular choice for many modern buildings. When considering energy consumption, however, a standard curtain wall around the addition would not allow Mayo to reach the EUI goal, Potts said. Even triple-paned wall glass could not deliver the energy savings needed.

The solution? Mayo chose a curtain wall component on the north side because it had little heat gain. The east, south and west sides feature rain screens over individual windows “in a wall construction that can have a lot more insulation added to it,” Potts said. “That solution came out as a winner. What this technique does is allow you to wrap all those decisions together early in the design process.”

Not all technologies Mayo considered made the cut. A new chiller system that would have allowed a design reducing ceiling heights to save money was vetoed after an assessment of cost and energy efficiency. The team instead chose high-efficiency variable air volume boxes, which use chilled and hot water from an existing Mayo plant.

Potts said Mayo will also be incorporating performance-based procurement into the design for buildings in the future.

At the University of Minnesota, the 202,000-square-foot Health Sciences Education Center is under construction at the corner of Harvard and Delaware streets on the East Bank campus in Minneapolis. The $66.7 million project adds a new building and renovates the existing Phillips-Wangensteen Building.

Since the university receives state money, it has to follow the B3 Guidelines on any building project. Trevor Dickie, project manager with the university’s Capital Planning and Project Management unit, said the goal was for the project to perform 70 percent better than the state energy code.

Much of the design process involved energy modeling to determine what strategies would work. Adding solar and geothermal heating and cooling were studied, but the site and the cost didn’t support either of those technologies. Instead, the university will deploy highly efficient heating and cooling systems and, in an unusual approach, send captured stormwater to a nearby cooling tower that is part of the cooling district serving the academic health center complex.

“Instead of dumping water down the drain, we’re capturing it, reusing it and saving money for the university and saving them from having to use good, potable water,” Dickie said.

Ideas for procurement

The report by Seventhwave and university researchers highlights a few best practices: Owners should set targets early, allow for flexibility, model impacts early and work with their utilities’ conservation-improvement programs, which help businesses and consumers save money on energy.

Hackel suggests three strategies for ensuring goals are met. One is holding onto a retainer, as Mayo did, until the project is deemed to be performing at the level called for in the contract. Another carrot is a bonus for reaching the project’s energy goals. And a third is leveraging the force of a relationship — teams working for Mayo or the university obviously want to keep clients happy, he said.

Strong believes selling performance-based procurement should not be difficult. “Why use more energy than you have to?” he said. “Why wouldn’t you maximize the energy potential of your building and not pay more for it?”